“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a decade-long holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Campbell’s Company (NASD: CPB)? Today, we examine the outcome of a decade-long investment into the stock back in 2015.
| Start date: | 06/15/2015 |
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| End date: | 06/12/2025 | ||||
| Start price/share: | $46.33 | ||||
| End price/share: | $33.32 | ||||
| Starting shares: | 215.84 | ||||
| Ending shares: | 292.87 | ||||
| Dividends reinvested/share: | $14.21 | ||||
| Total return: | -2.42% | ||||
| Average annual return: | -0.24% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $9,762.58 | ||||
As we can see, the decade-long investment result worked out poorly, with an annualized rate of return of -0.24%. This would have turned a $10K investment made 10 years ago into $9,762.58 today (as of 06/12/2025). On a total return basis, that’s a result of -2.42% (something to think about: how might CPB shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Campbell’s Company paid investors a total of $14.21/share in dividends over the 10 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of 1.56/share, we calculate that CPB has a current yield of approximately 4.68%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 1.56 against the original $46.33/share purchase price. This works out to a yield on cost of 10.10%.
Another great investment quote to think about:
“Waiting helps you as an investor and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.” — Charlie Munger
